What is progress? That is the question President Sarkozy of France has posed to a distinguished commission. It is exactly the right question, and the future of our culture depends on the answer.

GDP is not the answer, and the Stiglitz commission – whose report, What is Social Progress?, is published today – is clear about that: progress must be measured by the overall quality of people's lives. At this point the commission identifies two possible approaches. One is to focus on how people feel: are they happy and contented? (This idea goes back to philosophers of the Enlightenment, such as Jeremy Bentham.) The other is to focus on people's objective circumstances: do they have the capabilities (as Amartya Sen calls them) that are conducive to human flourishing? The commission does not choose between these approaches, and both are infinitely superior to GDP. But it matters greatly which way we choose.

This is not just a technical question. The answer should reflect our deepest beliefs about what matters in life. That is an ethical question. We want our rulers to make the world better by their actions, and we want to do the same ourselves. The criteria for judging both types of action must be the same.

It would obviously be convenient if we could identify one overarching good and, together with many Enlightenment philosophers, I believe that good is happiness. There are many things that are highly desirable: health, freedom, love, and so on. But if we ask why they matter, we can have a discussion: if you are ill, you feel bad. The same if you are enslaved or unloved; it makes you unhappy. But if we ask why it matters if you feel bad and unhappy, there is no answer. It is self-evident.

So it is time to reassert the noble philosophy of the Enlightenment. In this view, every human being wants to be happy, and everybody counts equally. It follows that progress is measured by the overall scale of human happiness and misery. And the right action is the one that produces the greatest happiness in the world and (especially) the least misery. I can think of no nobler ideal.

The focus on happiness is not self-contradictory, because modern psychology shows that people who care more about the happiness of others will themselves become happier. So policymakers should take as their objective the happiness and misery of the people. In previous centuries this would have been difficult to implement. But in recent decades there has been a huge increase in our ability to measure happiness and in our knowledge of its causes.

This new knowledge is important: as the commission points out, it is not enough to measure progress separately on many fronts. We also need to know how to add them up: otherwise we have no common currency with which to compare different types of improvement. If we accept overall happiness as our criterion (with more weight attaching to the relief of misery), this overarching criterion will give us an empirically defensible system of weights.

So I propose a campaign for the Principle of the Greatest Happiness. This says that I should aim to produce the most happiness I can in the world and, above all, the least misery. And my rulers should do the same. This principle would lead to better private lives and better public policy. We desperately need a social norm in which the good of others figures more prominently in our personal goals. Today's excessive individualism removes so much of the joy from family life, work and even friendship.

There have been objections to this principle, which can be answered. But even some sympathisers prefer the term "flourishing" to "happiness". Why is this? I fear it reflects a streak of puritanism – that happiness ought to come from some sources rather than others. But in the world's great literature, people discuss whether they are happy, not whether they are flourishing. When we discuss the quality of life, we should use the words that people use to describe themselves.

In the UK, the US and Germany, happiness has been stagnating for decades. This was one of the triggers for Sarkozy's commission. But the answer to his question cannot be purely technical. It must be based on the motivations we wish to develop in people: how they want to treat each other, as well as what policies they support. A civilisation based on the Greatest Happiness Principle would be a great improvement.